Correlation Between Ford and Voya Global
Can any of the company-specific risk be diversified away by investing in both Ford and Voya Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ford and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Voya Global Bond, you can compare the effects of market volatilities on Ford and Voya Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ford with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Voya Global.
Diversification Opportunities for Ford and Voya Global
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ford and Voya is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Voya Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Bond and Ford is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ford Motor are associated (or correlated) with Voya Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Bond has no effect on the direction of Ford i.e., Ford and Voya Global go up and down completely randomly.
Pair Corralation between Ford and Voya Global
Taking into account the 90-day investment horizon Ford Motor is expected to generate 5.45 times more return on investment than Voya Global. However, Ford is 5.45 times more volatile than Voya Global Bond. It trades about 0.01 of its potential returns per unit of risk. Voya Global Bond is currently generating about 0.03 per unit of risk. If you would invest 1,138 in Ford Motor on September 2, 2024 and sell it today you would lose (25.00) from holding Ford Motor or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Voya Global Bond
Performance |
| Timeline |
| Ford Motor |
| Voya Global Bond |
Ford and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Voya Global
The main advantage of trading using opposite Ford and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Voya Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Voya Global will offset losses from the drop in Voya Global's long position.The idea behind Ford Motor and Voya Global Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Voya Global vs. Icon Equity Income | Voya Global vs. Ms Global Fixed | Voya Global vs. Us Strategic Equity | Voya Global vs. Us Vector Equity |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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